Keller Williams Indy Metro NE

Welcome to the second of a twelve part series. The 12 Things we will be covering in this series are the following:

1. Focus on Seller Pricing Strategies
2. Master Staging
3. Learn and Use Creative Financing
4. Bulletproof the Transaction
5. Master Lead Capture and Conversion
6. Be More Proactive with Internet Leads
7. Get Lean and Mean with your Expenses
8. Increase Your People Effectiveness
9. Get Clear About Your Role
10. Create Buyer Urgency
11. Become an Expert in Short Sales (maybe)
12. Lead Generate, Lead Generate, Lead Generate…AND…MOFIR

Listing Presentation Mastery

To become a Master Listing Agent, you must understand and master staging.  The condition of a property makes a difference.  

                                      “Most sellers do not have taste for mass appeal,
                                      what they have is thier taste.”–Gary Keller

Using a third party staging company is a great way to help the seller accomplish thier goal of removing clutter and highlighting the key features of the home.  A professional stagger can have the conversation of eliminating nick knacks, de-cluttering counter-tops, moving furniture, etc much easier than agent typically can.  Just as a seller is not usually the best person to sell thier own home, a real estate agent is usually not the best person to stage thier own listing.  Even Joe Lucas, who is a certified stagger, hires a professional stagger.

Kim Alexander, our Operating Partner and Regional Director, recently told me a story about a home she had listed in her own neighborhood.  In fact, it was the home right next door!  Her team had the home on the market for more than 6 months, with plenty of activity but no offers, not even a sniff.  She then decided to bring in a staging company.  The home sold within two weeks, with multiple offers!!  This is the power of having a professional stagger as a part of your preferred vendors.

Setting the Stage

One of the great ways to show the seller the benefits of professionally staging a property and to help them be more receptive to the idea is to show them some photos.  You may want to take some pictures of a cluttered closet and then a clean closet, take photos of a messy kitchen and then a staged kitchen.  You can do this with other areas of the home such as the den, living room, and please don’t forget the yard.

Too many times, real estate agents forget to mention the importance of having great curb appeal.  In the past, I have heard sellers take about some of their showings.  They may say, “I saw them pull in the drive and just leave.  They didn’t even go into the home!  Why would they set the showing, have me leave the home and not even go in???”  Well, it is likely because they did not have great curb appeal.  (ie.  new mulch, trimmed bushes and shrubs, mowed lawn, fresh edging, colorful flowers, etc.)

Once you have shown the pictures to the seller, ask them…

                                      “All other things being equal to include price, size,
                                      and neighborhood, which home do you think will 
                                      be more appealing to the buyer?  So what you are
                                      saying is that you want to have your home staged
                                      this way?”

Cost of Staging

The cost of staging a home varies by home and company.  Typically, a staging professional will have an initial consultation fee.  During this initial consultation, the stagger will walk through the home and compile a list of recommended items for the seller to do.  The stagger will also give the seller a quote on what it will take for the seller to hire them to complete the staging.

At times, the seller may be able to negotiate the fees beyond the initial consultation to be paid out of closing.  Some agents have paid for the initial consultation and then the seller would pay for any additional services.  If you decide to pay for the initial staging cost, you may be able to talk with your vendor about paying them out of closing instead of cash out of pocket now. 

We will be having a professional staging company into our office for a “Lunch & Learn” on Tuesday, April 29 at 11:30 to talk about how they can help your sellers.  Please make a point to come by the office for a free lunch and to learn about Transitions, a preferred home staging company.

Welcome to the first of a twelve part series. The 12 Things we will be covering in this series are the following:

1. Focus on Seller Pricing Strategies
2. Master Staging
3. Learn and Use Creative Financing
4. Bulletproof the Transaction
5. Master Lead Capture and Conversion
6. Be More Proactive with Internet Leads
7. Get Lean and Mean with your Expenses
8. Increase Your People Effectiveness
9. Get Clear About Your Role
10. Create Buyer Urgency
11. Become an Expert in Short Sales (maybe)
12. Lead Generate, Lead Generate, Lead Generate…AND…MOFIR
 

The Truth

I often hear agents, talking about homes that they have listed and say, “Wow, I don’t understand.  The home is priced right but I just can’t get it sold.  It has been on the market for about 4 months now and I haven’t had a showing in over 3 weeks!”

The truth is that if the home was priced right, it would be sold!  In this type of market, we tend to get confused about what priced right means.  If a seller is wanting to sell their home, they must price it to sell…right? 

So, let’s talk about what priced right is.  If a buyer is willing to pay $145,000 for a specific home in today’s market, would priced right be a list price of $150,000?  The simple answer is, “No.”  Here is why…

The Law of Supply and Demand

Ever hear of the Law of Gravity?  Why is it a law?  It is a law because if you were to hold out a ball in front of you and let it go, it is going to drop.  The Law of Gravity says that it must.  It’s worth noting that it is not the Suggestion of Gravity…just as it is not the Suggestion of Supply and Demand. 

Simply stated, the Law of Supply and Demand tells us that when supply is low and we have high demand, prices go up.  Conversely, when we have high supply and low demand, prices go down.

Think about traveling during Spring Break or Memorial Day.  We can accurately anticipate that fuel prices are going to rise just before the heavy traveling begins and that the prices are going to drop just after the heavy traveling is finished.  We also see this happen around the Christmas holiday. 

Regardless of your faith, Christmas is the one holiday that seems to best illustrate the Law of Supply and Demand.  Just before Christmas, we see some of the highest possible prices for consumer goods due to the number of people buying gifts for all of their friends and families.  As soon as Christmas is over, we see most all prices drop.  By the first week of the new year, retailers have realized how over optimistic they were and quickly put the excess inventory on sale to get it sold.

Pricing It Right

The Law of Supply and Demand works the same way in real estate.  Currently, the Indianapolis market has less demand and significantly more inventory.  In addition, one in five (20%) of sales within the MIBOR area are REOs!  Just like the retailers, now is time to put the homes on sale!  For sellers to get their home sold fast, they need to price it right–the first time. 

It’s important to help your sellers stay ahead of the market by pricing the home just below the market, not just above it.  Otherwise, they will be chasing the market and realize bigger losses to get their home sold later. 

You only get one time to enter the market for the first time and the first impression is a lasting one.  If you over price a new listing, buyers who look at the home are going to remember it as a overpriced.  It is highly unlikely that they will ever view the home again, even after you have exhausted your price adjustments.

You have some great tools to help educate your sellers on pricing the home right.  A few ways you can help your sellers understand the importance of price includes a comparative market analysis, absorption rate analysis, and to show an illustration of the Law of Supply and Demand works in real estate.  John Lutz, a 40 year real estate veteran with 25 years as an appraiser, recommends giving more strength to the Active listings.  He says that the market has shifted and prices are dropping.  Therefore, your solds from just 6 months ago may not be relevant.  John says, “You need to know what your competition is doing more today than ever before.  If the home down the street is priced lower than yours, you are just helping them sell their house, not yours.” 

Getting It Right

If for some reason you and the seller missed the mark on pricing it the first time, you have an opportunity to get it right by adjusting the price.  You can and should utilize all of the same tools you used to get the price right when listing it.  For most of us, we are people please-rs and tend to shy away from price adjustment conversations.  Just remember, you have a fiduciary responsibility in helping your clients getting the home priced to sell. 

Cindy Marchant, a $16.5 Million producer, uses the listing agreement to get scheduled price adjustments.  Cindy recommends getting a 2% price reduction after every 11 showings or 21 days, whichever comes first and until it is sold.  Lisa Parrett also schedules price reductions in the listing agreement.  Lisa typically sets a dollar amount (usually $5,000-10,000) for the home to be reduced on specific days.  Both systems are fantastic!  Cindy and Lisa both also said that they rarely get objections to these price adjustment strategies. 

You can choose to schedule your adjustments upfront with the seller or “wing it” later.  Most top producing real estate agents agree, the expectation needs to be set at the listing appointment.  Even if you choose not to put the reduction in writing at the time of listing, you should at least prepare the seller as to when you will be calling to get that reduction. 

In The End

Our buyers and sellers hire us to help them make great decisions.  Our sellers trust our knowledge, experience, and tools enough to allow us to market their most valuable asset.  We need to acknowledge and respect that trust by being the professional they expect us to be.  We really don’t have the luxury of being professional only when it is convenient.  If it is time for you to deliver tough news to your clients, you need to do it.  The longer you wait, the worse it gets.  When it comes to pricing a listing in a buyer’s market, if you do not get the reduction today, you will likely need to double the amount of the reduction later.  That would not be considered looking out for your client’s best interest.

If you are looking to become better at your pricing strategies and your pricing scripts(hopefully, that is all of us!), please join us next week to see Linda McKissack, a Millionaire Real Estate Agent, in Cincinnati, OH.  Wouldn’t your sellers expect it? Click here for details.

Cheri went back to the doctor and was quickly referred to Ortho Indy for surgery.  After the doctor at Ortho Indy looked at the infection, he said that they were going to do surgery immediately. 

He also mentioned that the cream prescribed by her prior doctor was sealing in the infection and that the boot prescribed was hurting the wound more than it was helping since one of the straps on the boot was right over the wound.

After telling her how bad the infection was, the surgeon sprayed her foot to numb it and then began slicing into the wound to drain the infection.  Cheri said the sound of him slicing into her skin was one of the worst sounds she has heard.

Unfortunately, it appears that she will likely have to have this same surgery at least one or two more times.  The surgeon does believe that he can help the injury heal by performing these surgeries, therefore saving her foot and leg.

In the meantime, Cheri will not be able to work until at least the 15th of April and likely longer as she is not to put any weight on the foot.  She has doctor’s orders to stay off the foot as much as possible. 

So, we are looking for some volunteers within the office to help Cheri with dinner and/or helping her to and from the doctor’s office and pharmacy.  Please let Lisa Cripe know if you are able to help.  Lisa’s number is 863-4303 and her email is lcripe@kw.com.

Just a couple of weeks ago, Cheri, our Director of First Impressions, came into the office with a noticeable limb.  After questioning her, you would have found out that she was injured walking into her home when the screen door hit the back of her foot, causing a pretty deep gash.

We ribbed Cheri for a few days until she finally went to the doctor.  She found out that she desperately needed stitches and that she had torn her achilles.  If you have ever torn your achilles you know how painful this can be…..and to think she wasn’t even going to bother with going to the doctor.  She is definitely tougher than the rest of us!

Things seemed to be going well for a few days aside from the pain of the injury.  Then about a week ago, Cheri ran out of the medicated cream for the cut.  She called the nurse practitioner and was told to simply put some Neosporin on the injury.  This sounded innocent enough but Cheri had an allergic reaction to the Neosporin, which cause some major blistering and incredible pain. 

Cheri called letting the doctor know about the pain and blistering.  After going back to the doctor’s office, she found out that she may end up losing the entire foot due to the infection and allergic reaction.  You can only imagine the how Cheri felt upon hearing this news.  Seriously, it seemed so minor just a week or so prior. 

After just a few more days, she was again at the doctor’s office.  This time the doctor was telling her that the wound was not healing, the infection is spreading and that they may need to amputate the entire leg if she didn’t start to heal fast.  After talking to Amari DeKrey about her husband’s slow healing due to low potassium, Cheri convinced the doctor to do some blood work…hoping to find that she too had low potassium.

Just as we thought it could not get any worse, it did!  Cheri does not have low potassium, she has cancer in her blood stream.  Leukemia is the reason the leg isn’t healing. 

It is hard to say if this is good or bad.  If they had not found out why she wasn’t healing properly, she may lost her foot and leg this week.  Now that they know, they may be able to find a way to help her foot and leg heal.  Yet, it’s not ever good to find out that you have cancer.

Cheri is going back to the doctor tomorrow (Tuesday) to find out what she needs to do and what the probable outcome is.  So, please keep her in your thoughts and prayers.

 Thank you to the agents and vendors who helped in making this event a success!  We had just over 50 people RSVP to be at the lunch with just over 40 that showed.  As you know, we are not always able to predict our day in this business.  A few of our vendors had to stay at the office to service some of their other clients.  While having lunch, we heard many conversations that sounded something like this…..”Wow, no other office or company does this for us….thank you!”

For those of us at Keller Williams, we simply believe it is the right thing to do.  Our vendors are our partners.  They help us to insure that our clients’ transactions go as smooth as possible. 

At the lunch today, we had mortgage brokers, title representatives, artists, stagging professionals, contractors, inspection companies, and personal promotional companies.  All of these vendors were invited by other REALTORS in our office because they are the best of the best in their respective fields.  These are our trusted professionals. 

 Be sure to join us for our next Vendor Appreciation Party and invite all of your preferred vendors.   This is a great way for you to help your vendor build their business.  They will be able to network with each other and with other KW Agents.  Who knows, if you help them build their business, they may just help you build yours!

If nothing else, they will be able to join you for some good eats!

“The Economic Model is a formula that shows you how to plug in specific numbers you’ll have to achieve in specific areas to receive a specific net income.”
                                                  –The Millionaire Real Estate Agent

All real estate agents have an Economic Model.  For most agents, thier model is based on activities with no projected outcomes.  They simply believe that if they work hard and spend a little money in the business, they will earn all the money they want.  Typically, these agents feel a sense of relief and luck after each sale and each closing.  These agents are usually unsure where they will find the next month’s sales and closings.

A Millionaire Real Estate Agent’s Economic Model will show where the money is coming from (your gross revenue), where the money is going (your expenses), and how much is left over (your net income).  This type of business becomes predictable.  You know where your income is derived and are able to plan your budget accordingly.  If you had a choice of having a business with predictable outcomes versus one that does not, which would you rather have?  Well, guess what?  You have a choice!

When implementing the economic model into your business, you will need to focus on three key areas.  

1.  FOCUS ON THE NUMBERS YOU MUST HIT
One of the most beautiful things about your Economic Model is that it will tell you the numbers you need to hit in order to get the net income you deserve.

2.  FOCUS ON APPOINTMENTS
Appointments are the driving force behind your business.  With every activity in which you engage, you should be focused on getting the appointment.  Think about all of your lead generation activities (open houses, network meetings, FSBOs, expireds, sign calls, etc.) and think about how you may be able to better focus on getting the appointment.

3.  FOCUS ON CONVERSION
Know how well you are converting your appointments to agreements.  Tracking your appointments is one of the best ways to understand how effective your presentation and scripts are.  This is where your Economic Model will help you understand the areas you most need to improve.

Below is a sample of a Millionaire Real Estate Agent’s Economic Model.  All of the percentages are averages for most real estate agents.  If you do not yet know your conversion rates, use the ones in this model.  If you do not know your expenses or cost of goods sold, use 29.1% for each, until you are able to track your own percentages.  Determine your Net Income Goal and work the model backwards to determine how many appointments you need for the year.

To best understand how to use the 4 Millionaire Real Estate Models in your business, please read The Millionaire Real Estate Agent written by Gary Keller.  The chapter that explains these 4 models begins on page 119.   

The link below will give you a couple of exercises that will help you determine your own Economic Model and monthly appointment and sales goals.

Click Here ——> Economic Model Exercises 

Yes, there was and lot of foolin’ around in the office today.  I had no idea that we had so many practical jokers!!

In addition to all of the comic relief, we were able to get some real work completed.  We had a good business meeting this morning discussing some lessons learned and The Economic Model.  We also had a fantastic pitch-in lunch with many of our vendors.

Lesson Learned:  Seller Could Not Close…..Buyer Upset
Here recently, it seems that we have had several closing that did not happen due to the buyer financing.  Well, this time it is due to the seller’s financing.  Yes, that it correct.  We had a buyer for a home that was due to close this last Monday but did not due to the seller’s financing.

The seller of this property has a prepayment penalty attached to the mortgage of the home.  In order to close on the home, the seller would need to bring an additional $3500 to closing for a total of $8500.  The seller could not come up with the funds and now has refused to close escrows on the home. 

With all of the subprime loans and adjustable rate mortgages written over the last few years, we are seeing more prepayment penalities at the closing table.  Be sure that you are communicating directly with the lender to insure that there are no prepayment penalties attached to the mortgage note.  In this case, the seller did not think he had any penalties to be paid and did not find out about the prepayment penalty until this last Friday.  So, both the buyer and the seller are in a tough position now.  Do your best to save your clients this grief and do your homework.

Melissa Daily from Top Producer did a fabulous job of helping us better understand Top Producer 8i.  She went through most all of the features of the new system and the benefits of using 8i over Top Producer 7i.

Many of you know that I have been frustrated with Top Producer 7i.  I have always viewed TP 7i as a cumbersome program with a less than appealing interface.  For me, it has always seemed very difficult to understand and operate.  In fact, I have started and stopped using TP 7i at least 4 times in the past few years.

In contrast, I am thrilled with the new Top Producer 8i system!  The interface is more visually appealing and is a more user friendly program.  You will find that it is easier to navigate and find what you want to do.  In addition, the email component of TP 8i has been upgraded so that you are able to open attachments without saving the attachment to your computer first, which was a much needed enhancement.

Based on what I saw today, Top Producer now has the absolute best real estate database program available.  If you are a KW agent, you have additional action, follow up and listing plans to use.  As a KW agent, you can also send your postcards and letters to be printed by a professional printer and mailed out for less than you can do it yourself.

For those of you that were unable to attend today’s training, we are working with Melissa to come into the office over the next 2 weeks to give a more in depth TP 8i training.  You will also start to see beginner, intermediate, and advanced training classes being offered by Top Producer soon.  In the meantime, go to www.topproducercampus.com to learn some of the basics of the program.

To finish, I must say that I am very proud of our office.  Someone came to me today and mentioned that our Fishers office made up about 25% of the agents at the HAMCO MIBOR meeting this morning.  In addition, our office made up more than 30% of the Top Producer training this afternoon. Thank you for your continued leadership, support and professionalism!!!

Welcome to the Keller Williams Indy Metro Northeast blog!  This blog is designed to give you some additional insight as to what happens at Keller Williams and more specifically the Indy Metro Northeast offiice. 

If you have some blog topic ideas, please let Rob Montgomery (RobMontgomery@kw.com) and/or Gary Ruble (hom4you@aol.com) know about it. 

If you would like additional information about our office or a confidential interview, please contact Rob Montgomery at 863-4400.  We look forward to hearing from you!

We had a fantastic business meeting yesterday!  We were able to show some recognition for a few agents in our office, have an engaging conversation about today’s market and some pricing strategies, and we had an opportunity to pass out some profit share checks!

First, our market center recognized four people at the regional awards last week.  Mary McKeown was recognized for all of her hard work and effort over the last couple of years by being designated our Cultural Icon of 2007.  Herman Koehl and Michele Alexander were recognized for the struggles and obstacles that they have overcome to get their business back on track.  They were awarded the Agent Mountain Award for 2007.  Then, Lisa Parrett was recognized for her early production and leadership within the office with the Rising Star Award.  We also have the most productive agent in the Ohio Valley Region working with us……Jeff Kucic was recognized as the Top Producer in the region with over $1,000,000 in gross closed income!!!!  Jeff is a great example of the Millionaire Real Estate Agent model! Congratulations to all of our Award Winners!!!

As far as the statistics of the market, you may want to find the report at www.mibor.com.  Once you are on MIBOR’s site, go to the “Members Only” section and look for “Reports & Statistics.”  You will be asked to login with your username and password.  Once you have done that, scroll down to the reports and take a look at our market statistics.  You will find that there a lot of new listings coming on the market right now, that sales have been slower and that the market is starting to pick back up. 

The great news is that there are a lot of people wanting to sell their home so that they are able to purchase a new home.  We simply need to help them get the home priced right so that it will sell….go get the price adjustments today so that your sellers can take advantage of this buyer’s market!  Remember, there is not a lack of demand, buyers are simply stuck in overpriced listings!

Also, we were able to pass out nearly $2000 to agents yesterday morning! Now that we are back in the home selling season, we should see these profit share checks get bigger.  If you would like to receive some profit share money, join Ann Ruble and the Growth Committee next Thursday at the office.  You may call Ann at 863-4330 for more details.  

In Indianapolis, Keller Williams Realty is quickly gaining ground on the competition.  All of our competitors lost 13-18% in volume last year and we gained nearly 10%.  That is a big swing considering the market conditions!  We also found out that the Fishers/Geist office is the number one office in the Fishers territory.  Yes, we are the most productive office within the Fishers/Geist area!!  Congratulations on all of your hard work!!!